To any outsider looking in, it's a terrible time to be in the pipeline business. Politicians are building election campaigns on opposition to major infrastructure. Aboriginal groups are threatening blockades of new projects. Meanwhile, the rise of electric vehicles and other environment-saving technologies, together with policies aimed at curbing climate change, could start to wean the world off oil sooner than many expected.

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But Al Monaco is a stubborn optimist. As chief executive of Enbridge Inc., he has to be. After all, Monaco, 57, has just sealed the biggest deal of his career: a $37-billion merger with Houston-based rival Spectra Energy Corp. The move instantly created an industry giant—Enbridge's enterprise value now tops $160 billion. With an inventory of current and potential projects worth $75 billion, Enbridge anticipates annual dividend growth of 10% to 12% through 2024.

Monaco argues that Enbridge is now well positioned in the rapidly shifting energy sector. We asked him why:

Let's start with the deal. When did you first realize Spectra was a good fit with Enbridge?

We compete on some projects and worked with them on other projects, so we knew their assets. From time to time, we thought about [combining], but June, 2016, was the first time we met about a deal on a more active basis. And we know Spectra very well. When I was running our gas distribution business in Toronto, [Spectra CEO Greg Ebel] was running Union Gas. So we knew each other then, and we've kept in contact.

Shaun Robinson

And now you own Union Gas.

We love that business. That's the gem here. It has great stability, and we think it has a lot more room to grow. These franchises, Union and Enbridge Gas Distribution, are among the fastest-growth utility franchises in North America.

You've become a much bigger player in natural gas. What's driving that?

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Energy demand is going to grow by 30% to 40% over the next couple of decades, but the supply mix is changing, for all the reasons we know about, including a desire to reduce emissions. And natural gas has a huge role to play.

Big oil companies seem to agree with you and have shifted more of their investments to natural gas. How do you interpret the exit by Shell and others from the oil sands?

Large players have global inventories of prospects, so there are all kinds of reasons why they may exit a particular one. It could simply be about getting cash out of some parts of the business to redeploy into another part that has shorter cycle times. The oil sands, as you know, is a long game.

Sure, but there's a case to be made that they no longer see value in the oil sands due to high production costs and environmental risks, such as rising carbon emissions and expanding tailings ponds.

I'm more optimistic on this one—not because I have to be but because the fundamentals point that way. The upstream industry has applied technology to get costs down. A lot of that is structural, and the reductions are going to increase, perhaps exponentially, in the future.

So the fact that their cost structure is coming down, that you've got a resource base with a lifespan of 30, 40, 50 years, and it's a [production] operation as opposed to an exploration operation, that's all going to hold the oil sands in pretty good stead long term.

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The Spectra deal has given you a large footprint in British Columbia, where the NDP and Greens have pledged to kill major pipeline expansions. Are you worried about a precedent?

I'm more worried about the uncertainty created. In our business, when you're putting large sums of capital to work, it's important that investors have clarity on what the regulatory process is and the ability to execute projects. But we've now got projects throughout the continent, and we've got perhaps a wider diversity, so we are less sensitive to any one particular region. But we're watching the B.C. situation closely.

Where are you looking for growth?

The U.S. Northeast, in a very big way. The nice thing is that it's natural gas-based. We've got so much natural gas infrastructure already there that expanding it has huge potential. And when you have assets in the ground, your ability to extend their reach is a big advantage. This is one thing that is being missed today. You know how hard it is to build [new pipelines], so being there already has raised the value of those assets.

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